Annex 1
COMMENTS ON THE WHITE PAPER BY THE SATELLITE
AND CABLE BROADCASTERS' GROUP
A NEW FUTURE FOR COMMUNICATIONS
EXECUTIVE SUMMARY:
FEBRUARY 2001
This submission is a distillation of the views
of the members of the Satellite and Cable Broadcasters' Group
(see Annex for list of member companies). It focuses only on issues
where there is a broad consensus. Individual companies may, in
their own submissions, comment on separate points, or expand on
the issues mentioned.
The SCBG brings together the major satellite
and cable broadcasters licensed in the UK and between them they
collectively represent more than 70 of around 130 cable and satellite
channels now available to British viewers. The cable and satellite
sector is an increasingly significant part of the television market,
employing over 6,000 people and with total revenues exceeding
£2.1 billion in the 1999-00 financial year. By the end of
2000, over nine million UK households (over 43 per cent of the
total) had access to multi-channel television, and 28 per cent
of UK households now have access to digital television. In 2001,
SCBG members expect to broadcast over 300,000 hours of programmes
in the UK alone. This is more than seven times the output of the
five main terrestrial channels.
REGULATION AND
THE CREATION
OF A
DYNAMIC, COMPETITIVE
MARKET
The White Paper's commitment to create a dynamic
market which will lead the world in innovation, and a climate
that is good for investment is encouraging (1.2.2). However, the
delivery of this will depend not only on the regulatory framework
but also the way in which OFCOM uses its powers. The objectives
to keep regulation "to the minimum necessary" and the
duty on OFCOM "to keep markets or sectors under review and
roll back regulation promptly" (1.3.9 and 8.11) are important.
Specific constraints should be imposed on OFCOM to be light touch.
OFCOM needs a clear new regulatory perspective
and orientation which focuses it firmly on the creation of a vibrant
and competitive communications sector. OFCOM's primary duty, as
a regulator with "concurrent powers", should be to promote
competition. It should also be required to develop an attractive
climate to encourage continued speculative investment in building
distribution infrastructure (be it cable, satellite, terrestrial,
mobile or ADSL), and developing innovative content, be it interactive
or linear based entertainment that nurtures creativity in domestic
production.
The existence of nine different regulators,
and the disparities between the regulatory regimes of the different
parts of the communications sector, are increasingly causing difficulties
and delays in the day to day operation of our business. SCBG members
therefore stand to benefit considerably from the greater coherence
of regulation (1.3.5) that can be introduced by collapsing five
regulators (possibly six) (8.3.1) into a single regulator (OFCOM),
and from the avoidance of "double jeopardy".
It is essential that OFCOM be required to conduct
regular regulatory assessments to judge the market impact of its
actions across the whole supply chain. This will help OFCOM avoid
a system of premature or inappropriately burdensome regulation
that could inhibit the emergence of effective competition. The
Better Regulation Task Force principles of transparency, proportionality,
consistency and targeting (8.5.3) should be supplemented by the
principles of independence, relevance and flexibility, fairness
and technological neutrality, and regulators should be required
to have technical and industrial expertise.
CABLE AND
SATELLITE SECTOR
The contribution made by cable and satellite
broadcasters to viewing choice and diversity for all sectors of
the population is not properly acknowledged in the White Paper.
Nor does it acknowledge the fact that the commercial broadcasting
sector, not public service broadcasters, will drive digital take-up,
with 75 per cent of British homes expected to subscribe to some
sort of digital pay TV package by 2002. The perception remains
that public service broadcasters deliver quality and diversity,
and the commercial broadcasting sector delivers only popular programmes.
This is far from the truth. Programming traditionally associated
with public service broadcasting is increasingly being delivered
by cable and satellite broadcasters. Niche channels have increased
viewing choice for various sectors of the population whose interests
have been under-served by public service broadcasting. However,
public service broadcasters such as the BBC are often acting in
very commercial ways.
PUBLIC SERVICE
BROADCASTING
The White Paper places considerable emphasis
on preserving and promoting public service broadcasting as being
the primary means of delivery of quality and diversity. The SCBG
supports the continuation of public service broadcasting, as long
as the Bill shores up and does not relax their regulatory obligations
which are the price of the privileges of "must carry",
"due prominence", and use of scarce spectrum that the
PSBs enjoy. The legal framework must ensure that the public service
broadcasters are affordable, and have reach and relevance for
all sectors of the population. If the BBC and ITV in particular
are permitted greater flexibility, this will have an adverse market
impact on the cable and satellite sector which could hinder its
development.
The White Paper fails to establish satisfactory
external, independent regulatory scrutiny for the BBC in terms
of both economic and content regulation. OFCOM should be given
responsibility for the BBC's role and remit, content, the approvals
process for new BBC channels/services, the ongoing appropriateness
of the BBC's privileges and access to scarce spectrum, and the
enforcement of state aid in compliance with EU competition rules.
Unless OFCOM has such powers of scrutiny over the BBC, as the
largest single UK broadcaster, it will be unable to fulfil effectively
its objective to protect and promote competition in the sector.
The Government will need to think seriously
how public service programmes will be delivered in the long-term,
as the reach and audience appeal of public service television
declines over time. The Bill should anticipate this by establishing
alternative mechanisms, such as a public service fund, which would
run in parallel with the licence fee for the next few years to
nurture the production of public service programmes from sources
alternative to the BBC. It should minimise the anti-competitive
effect of measures such as "must carry" and "due
prominence", which artificially bolster the position of public
service broadcasters, by ensuring that distribution platforms
are fully compensated. It should also establish a sunset period
for these protectionist measures which should have no place in
a competitive market.
CONTENT REGULATION
The three tier regime for regulating broadcast
content establishes a sliding scale to reflect different consumer
expectations. However, the SCBG is very concerned about the additional
licence requirements which would be imposed on cable and satellite
broadcasters under the current proposals in tier one, including
mandatory targets for subtitling, signing and audio description
across all broadcast platforms and training targets.
The boundaries between the Internet and cable
and satellite broadcasting are increasingly unclear and will fade
completely before the ink is dry on the Bill. The SCBG believes
the regulatory distinctions between tier one (which would apply
to cable and satellite broadcasters) and tier zero (which will
apply to the Internet) will have to become as minimal as possible
since exactly the same content can already be delivered to viewers
by several different media.
We hope the Bill would look further ahead than
the White Paper in taking into account forthcoming reviews of
existing European legislation. It would be helpful, for example,
if the Government were to signal its intention to abolish European
quotas completely in the forthcoming review of the EU TV without
Frontiers Directive since they are not necessary in the competitive
European broadcasting market.
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